Non-Traditional Business Thinking From 37 Signals

I wrote this article for the Small Business Library blog about my key takeaways from the recent book Rework from the guys behind 37 signals. I really enjoyed this book because it challenged a lot of the traditionally held beliefs on how to be successful in business so it was unique and thought provoking. David also gave a great talk recently at Stanford called “Unlearn Your MBA” which you can watch here.

Rework by Jason Fried and David Heinemeier Hansson, takes an alternative look at starting and building a successful business. Jason and David founded the successful Chicago software company 37 signals based on business principles that often contradict with traditional thinking on business. Here are a few of my favorite ideas from the book.
Get Enough Sleep

In Rework, the authors discuss that entrepreneurs often brag about how little sleep they get. The problem with sleep deprivation is that although you work more hours, you will not be able to think very well if you are tired and this can lead to poor decisions.
Don’t Advertise

One of the drawbacks of buying advertising is that you know that some of your advertising isn’t working, but you don’t know which part. 37 Signals uses non-traditional media like their blog, Signal Versus Noise, which has over a hundred thousand readers. They are able to reach a large number of people with their message at no cost besides the time to write thoughtful blog articles.
Planning is Guessing

Often new businesses create 1-year, 5-year, or even 10-year plans. But the authors argue that we can not predict what will happen in the future so plans are often irrelevant when conditions change. And often business owners will stick to their plans simply because they have invested so much time in developing a business plan.
Don’t Get Venture Funding

The authors say that one of the major mistakes that new businesses make is taking outside investment from venture capitalists, but this could also apply to other financing. The problem with having a lot of someone else’s money to spend this can take the business owner’s focus off the important thing, profitability. Often companies that have funding put off worrying about profitability until later, which the authors say is like trying to build a rocket ship without worrying about gravity.
Hire When It’s Painful
Often growing businesses hire quickly to keep up with demand, but the authors warn to be careful not to hire too quickly. They recommend hiring when there’s more work than you can handle for an extended period of time. There are several disadvantages to hiring too quickly. One problem is that it is difficult to eliminate staff once you hire them even if they are no longer needed. They also point out that it is difficult to be truthful if you disagree when there are a lot of strangers in the office as most people want to be polite and non-confrontational.